If you’re a real estate scavenger, who likes to buy foreclosure properties at a deep discount and “flip” them to retail home buyers, the FHA anti-flipping rule has always been a thorn in your side. Come Monday, February 1, 2010, HUD has agreed to suspend that prohibition for a period of 12 months.
123flip.com reports that there are certain guidelines which lenders are directed to follow:
1. All transactions must be arms-length, meaning that there must not appear to be any impropriety taking place between buyer and seller. This requirement also indicates that any prior flipping activity on the home in the previous 12 months may be a red flag to the lender.
2. In cases where the sale price exceeds the previous purchase price by more than 20%, the lender will be required to take extra steps to ensure the sale is legitimate. This includes a second appraisal and a full FHA […]
Original post by Brian Brady and software by Elliott Back
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